Equities started the day off strongly following a cooler-than-expected CPI report. The CPI shows consumer level inflation cooled more than expected at the core and headline levels and on a YOY basis but remains hot nonetheless. The reality of the inflation situation and its impact on the FOMC and the S&P 500 earnings outlook capped gains and caused the market to move lower and close near the low of the day. The takeaway for investors is that resistance to higher prices is still strong and keep the index from breaking out of its current range.

Today is the next potential catalyst for the market. The FOMC is expected to hike interest rates but a slower pace than before and it may confirm the idea that inflation has peaked. In this scenario, the S&P 500 could surge again and this time break above the 4,100 level and extend the rebound to a multi-month high.